Dear Coverage Pointers Subscribers:
I trust that you have retired your shamrock ties and stockings the back of the closet, scheduled the removal of your snow tires and are considering the color of your spring plantings. For us, we await the removal of the ice boom, those timbers protecting the mouth of the Niagara River from accepting Lake Erie icebergs and thereby preventing their damaging the water intakes at the Niagara Falls some 16 miles north When the ice boom is removed, like the swallows returning to Capistrano, it is a official sign of winter's end.
GREAT STUFF:
The attached issue of Coverage Pointers is chock full of interesting decisions. The headlines are at the bottom of this letter.
LINKEDIN:
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- SEATTLE BOUND: PLRB - LIRB ALERT:
hey
CHICAGO -- DRI ALERT
Audrey and I will be in Chicago for the DRI Insurance Coverage and Claims Institute from April 1-3. See her letter below. Again, we really hope to see you at that stellar program.
PEIPER ON PROPERTY (KERMIT'S PAL) and the GREEN COVERAGE TEAM:
Greetings, and permit me to be the last to wish you a belated Happy St. Patrick's Day. Although I try to come up with a theme for each issue, this week will break the mold. We do have interesting decisions on water damage claims, disability claims and the ever popular subrogation dispute with an interesting coverage twist. In addition, be sure to check out our review of the Office of General Counsel's decision regarding a carrier's obligation to cover the duty to defend under a Directors and Officers policy. As you can see, it is tough to lump those together.
A little more green before I go, and as a teaser for what's to come, starting next issue we will begin a multi-part series on the challenges sure to be had with the green building revolution that is already underway. Given the push to developing a more energy efficient country, we can see a myriad of issues to come. As with everything, this will, if not already, make an impact the insurance industry. Surety issues, contractor/subcontractor specification issues, D&O issues, and simple first party property issues are but a sampling of the challenges we can already foresee.
With a tip of the cap to Kermit the Frog...It's not easy being green, and it's not going to be easy insuring green either!
Steve Peiper - [email protected]
Editor's Note: Kirstin Lowery Sommers, who joined our firm Of Counsel fairly recently, is one of only a handful of LEED® Accredited Professional attorneys in New York State and the only one in Western New York. The accreditation is by the Green Building Council. LEED (Leadership in Energy and Environmental Design) is a voluntary, consensus-based national rating system for developing high-performance, sustainable buildings. With Kirstin being the only LEED Certified lawyer in Western New York and Steve focusing on first party coverages, we have a mighty powerful Green Coverage Team at your service.
ONE HUNDRED YEARS AGO TODAY - March 20, 1909:
I am glad that so many of you enjoy this part of the newsletter - I receive more commentary on the news story than on the coverage cases!
A century ago, all of the nation's papers reported on the capture - the day earlier - of the kidnappers of eight-year-old Billy Whitla. On the morning of March 18th, a janitor walked into a Sharon, PA classroom telling the teacher that someone had been sent my Billy's father to take him out of school that day. Billy's dad was a prominent NYC lawyer and Billy's uncle was a steel millionaire. The teacher helped him get his hat and coat on and Billy left school.
A man in a buggy was waiting for him and told Billy to call him "Jonesy." A few blocks later, the buggy stopped and Jonesy told Billy to mail a letter so his mother would know where he was. It was actually a ransom note. Billy was told that his dad was concerned that Billy would contract smallpox and that Jonesy was going to protect him from going into a "pesthouse" (a place Billy knew that people with incurable diseases went to die."
Jonesy (James Boyle) was in fact a kidnapper and Billy was taken by train to Cleveland where James and his wife Helen held him. Billy memorized the train stops and the street signs, information later used to capture the kidnappers.
After four days in the apartment - after Mr. Whitla paid $10,000 in ransom - the boy was released on a streetcar, recognized by passengers (since Billy's face was plastered in all the papers) and returned to his father. The final line was on the ransom note had said: "Dead boys are not desirable."
Billy was able to give the police enough information for the Cleveland authorities to arrest the Boyle's in a tavern. Mrs. Boyle had all but $210 of the ransom money, still in the bank wrappers, sewn in her skirt. James Boyle was tried and sentenced to life in prison. He died while in confinement. Helen Boyle was given 25 years but was paroled after 10. Billy Whitla became a lawyer. He married and had two children. Billy died at age 32 when he contracted influenza and died of complications.
From Audrey Seeley and her Queendom of No Fault:
I survived Vegas. I will leave it at that.
It looks like Spring is here! The sun is shining and snow is finally gone. With Spring, comes Spring Training, and I am not speaking of training for a professional sport. If you need a refresher class or have an issue in your office that is presented time and again in which you need some assistance with please let us know. We can tailor the class to your needs. In the past we have been asked to speak on effective IMEs/Peer Reviews/Medical Record Reviews; conducting EUOs; the basics of claims handling - remembering the time frames and deadlines; drafting denials; and preparing persuasive arbitration evidence submissions. If you are interested please do not hesitate to email me at [email protected].
Another training program that is coming up, and this is my last advertisement for it, is DRI's Insurance Coverage and Claims Institute in Chicago from April 1 - 3. It is a great insurance coverage program and a great networking opportunity in today's economic climate. I was informed that the hotel rates were just reduced to $199.00 per night, which is a good deal for Chicago! If you are interested in the program and need more information send me an email at [email protected].
Audrey
EARL'S PEARLS
Our ever creative and prolific Earl Cantwell offers great insight into the corporate attorney-client privilege in this week's column. Thanks Earl.
THIS WEEK'S ISSUE:
This week's issue is chock full of interesting decisions. Margo's on well-deserved holiday, and we can expect a few extra decisions in next week's column:
Dan D. Kohane
[email protected]
- Indemnity Agreements are Not Insurance Policies. Plain and Simple
- Waiver of Conflict Means what it says
- In the Absence of a Choice of Law Provision, the Domicile of a Corporate Insured should be Used to Determine Choice of Law for Coverage Purposes
- Existence of Duty to Defend Based on Allegations
- In Direct Action Against Insurer, Underlying Judgments Presumptively Valid
- In Uninsured Motorists Framed Issue Hearing, UM carrier Establishes that Tortfeasor's Insurer Failed to Properly Cancel Policy
MARGO'S MUSINGS ON SERIOUS INJURY UNDER NEWYORK NO FAULT
Margo M. Lagueras
[email protected]
- Range-of-Motion Findings Must Be Compared To What Is Normal To Support Position
- Motion for Leave to Renew Must Show Due Diligence
- Contradictions in Plaintiff's Submissions Doom His Claim
- Affirmation Based On Unsworn Reports Has No Probative Value
- Plaintiff's Word Is Insufficient
- Motion Fails Where Range-of-Motion Findings Are Not Compared to What Is Normal
- Defendants' Experts' Reports Satisfy Plaintiff's Burden Under 90/180-Day Category
- Non-Contemporaneous Range-of-Motion Examinations Do Not Defeat a Summary Judgment Motion
AUDREY'S ANGLES ON NO-FAULT
Audrey Seeley
[email protected]
Arbitration
- IME Failed to Use Magic Words of Lack of Medical Necessity Therefore Denial Cannot Be Upheld
- Insurer's Denial of Laminectomy Upheld on Peer Review
Litigation
- Court Properly Search Record and Granted Partial SJ to Insurer But Partial SJ Granted to Plaintiff
- Medical Necessity of Supplies is an Issue of Fact Due to Dueling Physician Opinions
- New Jersey Law Applied to New York Accident After Center of Gravity Test Performed.
- Plaintiff's Witnesses Did Not Assist in Establishing Prima Facie Case at Trial
- Yet Again, Plaintiff's Witnesses Did Not Assist in Establishing Prima Facie Case at Trial
- Insurer Did Not Submit Sufficient Evidence to Support Denial on Failure to Attend IME
- Plaintiff's Burden of Proof at Trial is Easily Achieved, But Not THAT Easily Achieved
- Failure to Provide Requested IME Report Can Not Result in Sanction of Loss of Defense to Insurer
PEIPER ON PROPERTY (and POTPOURRI)
Steven E. Peiper
[email protected]
Of Property
- Third Time NOT a Charm for Plaintiff in Disability Case
- Coverage for Clogged Drains is Triggered where the Damage Arose from...A Clogged Drain
- Without Establishing a Reason for Denial, Travelers' Payment of a Claim could Not be Deemed to have been Volunteered
And Potpourri
- A Carrier May Not Issue a D&O Policy that Shifts the Duty to Defend to the Insured
- Hope to see some of you out in Seattle or in Chicago in the coming two weeks. Call with any questions.
Dan
Hurwitz & Fine, P.C. is a full-service law firm
providing legal services throughout the State of New York
NEWSLETTER EDITOR
Dan D. Kohane
[email protected]
INSURANCE COVERAGE TEAM
Dan D. Kohane, Team Leader
[email protected]
Michael F. Perley
Katherine A. Fijal
Audrey A. Seeley
Steven E. Peiper
Margo M. Lagueras
FIRE, FIRST-PARTY AND SUBROGATION TEAM
Andrea Schillaci, Team Leader
[email protected]
Jody E. Briandi
Steven E. Peiper
NO-FAULT/UM/SUM TEAM
Audrey A. Seeley, Team Leader
[email protected]
Tasha Dandridge-Richburg
Margo M. Lagueras
APPELLATE TEAM
Jody E. Briandi, Team Leader
[email protected]
Scott M. Duquin
Index to Special Columns
Kohane’s Coverage Corner
Margo’s Musings on “Serious Injury”
Audrey’s Angles on No Fault
Peiper on Property and Potpourri
Earl’s Pearls
Across Borders
Duquin -- The Duke of Lead
Dan D. Kohane
[email protected]
3/17/09 Larry E. Knight, Inc. v. QBE Insurance Corp.
Appellate Division, First Department
Indemnity Agreements are Not Insurance Policies. Plain and Simple.
Issues of fact exist as to whether the injuries in the underlying action were caused by negligence on the part of defendant JEM Erectors. If they do not, JEM had no duty to indemnify Knight under the subcontract. JEM is not an insurer has no duty to act like one. The underlying subcontract did not require JEM to provide insurance for Knight so Knight cannot be deemed an additional insured under the additional-insured endorsement to JEM's commercial general liability policy. Likewise, JEM cannot be liable for any breach of duty to procure insurance for Knight.
3/17/09 Centennial Insurance Company v. Apple Builders & Renovators, Inc.
Appellate Division, First Department
Waiver of Conflict Means what it Says
Apple Builders sought to disqualify Centennial attorneys from representing both Apple and Centennial in a legal proceeding. Earlier, Apple had executed a written waiver in its retainer agreement with the same law firm specifically waiving any conflict of interest that might arise from the firm's representation of Centennial and Apple. Apple cannot compel the disqualification of plaintiff's counsel simply because the representation to which it consented has since devolved into litigation.
3/17/09 Appalachian Insurance Company v. Riunione Adriatic Di Sicurata
Appellate Division, First Department
In the Absence of a Choice of Law Provision, the Domicile of a Corporate Insured should be Used to Determine Choice of Law for Coverage Purposes
A contract of liability insurance is governed by the law of the state which the parties understood was to be the principal location of the insured risk. When necessary to determine the law governing a liability insurance policy covering risks in multiple states, the state of the insured's domicile should be regarded as the principal location of the insured risk. A corporate insured's domicile is the state of its principal place of business.
3/10/09 Gristede's Operating Corp., v. Axis Specialty Insurance Company
Appellate Division, First Department
Existence of Duty to Defend Based on Allegations
The existence of the duty is dependent upon whether sufficient facts are stated so as to invoke coverage under the policy. Here, the policy did not cover plaintiff against the claims alleged in the underlying class action, and defendant thus had no duty to advance defense costs.
3/3/09 Hernandez v. American Transit Insurance Company
Appellate Division Second Department
In Direct Action Against Insurer, Underlying Judgments Presumptively Valid
It is unclear from the decision why American Transit denied coverage in the first place. However, the injured party took judgment against the American Transit insured and then brought a direct action against American Transit, under Insurance Law Section 3420(a). The Second Department holds that the underlying judgments are presumptively valid, unless the carrier can establish that the judgment was not. Here, there was no contrary evidence demonstrating invalidity.
3/3/09 Matter of Autoone Insurance Co., v. Schulere
Appellate Division Second Department
In Uninsured Motorists Framed Issue Hearing, UM carrier Establishes that Tortfeasor’s Insurer Failed to Properly Cancel Policy
An uninsured motorists claim was brought. Autoone Insurance brought an application for a permanent stay claiming that the tortfeasor’s vehicle was in fact not uninsured but insured under a policy with Integon. Auto one claimed that Integer had not validly canceled the North Carolina policy.
Integer argued that a December 1, 2005 cancellation notice was sent to its insured by his insurance premium finance company (PFA). However, Integer failed to present evidence that the PFA was effective. However, Integer failed to present evidence at the hearing that the PFA had obtained the power of attorney which would permit it to cancel the policy under NC law. Moreover, Integer did not establish that it properly mailed the cancellation notice. Without proof of lawful and proper cancellation, court granted permanent stay of UM arbitration and Integer is on the hook.
Editor’s Note: The usual reminder when a case like this appears. Autoone did it right. Recognizing that the arbitrator has no power to determine that Integer did not properly cancel policy, Autoone brought an application, by order to show cause within 20 days of the demand for arbitration, seeking a permanent stay. Had it not done so, it could not have avoided UM coverage.
MARGO’S MUSINGS ON SERIOUS INJURY UNDER NEW YORK NO FAULT
Margo M. Lagueras
[email protected]
3/10/09 Walker v. Public Administrator of Suffolk County
Appellate Division, Second Department
Range-of-Motion Findings Must Be Compared To What Is Normal to Support Position
Defendants all relied on the same submissions which included affirmed reports of an orthopedic surgeon and a neurologist. Those reports, although noting specific range-of-motion limitations of the lumbar spine, straight-leg raising, and shoulder abduction and rotation, all failed to compare those findings to what is normal and therefore failed.
3/10/09 Ramirez v. Khan
Appellate Division, Second Department
Motion for Leave to Renew Must Show Due Diligence
Once again the court reiterates that a motion for leave to renew, while it may be granted even though the moving party knew the facts at the time or the original motion, it “is not a second chance freely given to parties who have not exercised due diligence in making their first factual presentation.” And here, plaintiff simply did not include a doctor’s affirmation and had not good reason for not having done so. The court also noted that the affirmation would not, in any event, have varied the prior determination. Comment added perhaps just to take some of the smart out of the slap.
3/10/09 Raleigh v. Ram
Appellate Division, Second Department
Contradictions in Plaintiff’s Submissions Doom His Claim
These defendants rightly win a reversal. Their expert’s affirmation, in addition to opining that plaintiff had no permanent injury, limitation or restriction, also set forth range-of-motion testing, all of which was normal. And, he not only gave specific measurements but also the norms compared against. In opposition, plaintiff’s physician concluded he sustained a tear to the left shoulder which limited range-of-motion. However, the physician did not reconcile these conclusions with the orthopedic surgeon’s report following arthroscopic surgery two months after the accident and which found no limitations of motion, tears, or of any other accident-related conditions.
3/10/09 Ferber v. Madorran
Appellate Division, Second Department
Affirmation Based On Unsworn Reports Has No Probative Value
Another reversal in favor of the defendants, this time because plaintiff simply did not raise an issue of fact in opposition to defendants’ motion where her expert’s affirmation relied on unsworn reports and therefore had no probative value. In addition, the court again noted that bulging discs seen in an MRI are not evidence of a serious injury without objective evidence of the resulting extent of the alleged physical limitations and their duration. Also fatal is the failure to offer any opinion as to the cause of the bulging disc.
3/3/09 Gentilella v. Board of Education of Wantagh Union Free School District
Appellate Division, Second Department
Plaintiff’s Word Is Insufficient
Plaintiff had a prior accident in which he injured the same parts of his body as in the accident in question. Defendants’ expert radiologist compared MRI studies performed shortly after the first accident, and which revealed “longstanding chronic degenerative discogenic disease”, with studies taken shortly after the subject accident and determined there was “no definable interval change.” Plaintiff’s expert, while acknowledging the prior accident and treatment, did not review any of the prior medical records and merely took plaintiff’s word that his injuries from the first accident had resolved. Not good enough.
3/3/09 Marshak v. Migliore
Appellate Division, Second Department
Motion Fails Where Range-of-Motion Findings Are Not Compared to What Is Normal
Plaintiffs here win a reversal. Defendants’ experts set forth range-of-motion findings with regards to the plaintiff’s lumbar spine and supine straight leg raising but failed to compare those findings with what is normal. Therefore, the court could not conclude that the decreases in range-of-motion noted were merely mild, minor or slight so as to be considered insignificant and not serious.
3/3/09 Neuburger v. Sidoruk
Appellate Division, Second Department
Defendants’ Experts’ Reports Satisfy Plaintiff’s Burden Under 90/180-Day Category
The Appellate Court finds that, on reargument, the trial court should not have adhered to its prior decision awarding summary judgment to the defendants as the bills of particulars served on the defendants alleged that the plaintiff sustained a medically-determined injury within the 90/180-day category. The defendants’ own experts’ reports of examinations performed over three years after the accident noted that the plaintiff missed 18 months of work as a result of the accidents and neither related his medical findings to the 90/180-day category, thus failing to show that the plaintiff did not have an injury within the 90/180-day category.
3/3/09 Shevardenidze v. Vaiana
Appellate Division, Second Department
Non-Contemporaneous Range-of-Motion Examinations Do Not Defeat a Summary Judgment Motion
Here it is the defendant that wins a reversal. The case arose out of a rear-ending with four plaintiffs all claiming serious injuries. Defendant submitted plaintiffs’ own deposition testimonies and affirmed medical reports of his experts who determined, based on objective range-of-motion tests, that plaintiffs were not disabled. In opposition, plaintiff’s only admissible evidence was affirmed reports of examinations performed over three years after the accident. Those range-of-motion limitations were not contemporaneous with the accident and defendants’ motion should have been granted.
AUDREY’S ANGLES ON NO-FAULT
Audrey Seeley
[email protected]
Arbitration
3/18/09 In the Matter of the Arbitration Between Mark DelMonte DC PC and GEICO Ins. Co., Arbitrator Veronica K. O’Connor (Erie County)
IME Failed to Use Magic Words of Lack of Medical Necessity Therefore Denial Cannot Be Upheld.
The Applicant sought reimbursement for chiropractic services rendered to a patient as a result of a November 25, 2007, accident. The insurer denied the services on the basis of an independent chiropractic examination (“IME”) conducted by Christopher S. Ferrante, D.C. Mr. Ferrante examined the eligible injured person (“EIP”) on two occasions. After the second examination, nearly one year post accident, Mr. Ferrante recommended that chiropractic care end as the EIP’s continued care was merely palliative and not curative.
The assigned arbitrator would not uphold the insurer’s denial based upon the IME as the chiropractor’s statement that the EIP reached “end results in my specialty, chiropractics.” This phrase was interpreted by the arbitrator as being the equivalent of statement maximum medical improvement which is not a valid basis for denial.
3/16/09 In the Matter of the Arbitration Between Greater Rochester Ortho, P.C. and Preferred Mutual Ins. Co., Arbitrator Thomas J. McCorry (Erie County)
Insurer’s Denial of Laminectomy Upheld on Peer Review.
The eligible injured person (“EIP”), a 53 year old male, was involved in a motor vehicle accident and underwent a lumbar laminectomy with Dr. Cappicotto. The insurer denied the laminectomy based upon a peer review conduced by Dr. Richard Goodman. Dr. Goodman’s report indicated that the medical records revealed spinal stenosis with degenerative changes. There was no documentation regarding any change in the spinal canal from the accident. The only documentation was subjective complaints from the EIP. Dr. Goodman concluded that the surgery was not causally related to the accident but was medically necessary for pre-existing non-causally related arthritis.
Dr. Cappicotto rebutted Dr. Goodman’s report stating that the EIP never complained of leg or back pain prior to the accident. The assigned arbitrator determined that Dr. Cappicotto’s opinion was based heavily upon the EIP’s subjective complaints and minimized the post accident MRI reports. Dr. Cappicotto also did not address the fact that the EIP was obese for years prior to the accident and suffered from a pre-existing work related injury which resulted in the EIP using a cane and short leg boot. A few months prior to the accident the EIP underwent surgery to remove hardware from his ankle. The assigned arbitrator concluded that it would be difficult to believe that the degenerative changes coupled with the EIP’s prior accident would not cause him back pain.
Dr. Goodman did issue a subsequent report indicating that the issue in this case was whether the EIP’s comments that he was asymptomatic prior to the accident was credible. Dr. Goodman reiterated his prior opinion which the assigned arbitrator found persuasive.
Litigation
3/16/09 Audubon Physical Med and Rehab, PC a/a/o Juan Estevez v. GEICO Ins. Co.
Appellate Term, Second Department
Court Properly Search Record and Granted Partial SJ to Insurer But Partial SJ Granted to Plaintiff.
The trial court should have granted the plaintiff summary judgment on its first cause of action as the defendant failed to submit a sufficient affidavit from an individual who could attest that the verification requests for IMEs were mailed and that the eligible injured person failed to appear at the IME.
The trial court to properly exercise its authority to search the record and grant the defendant summary judgment on the second cause of action even though the defendant did not cross move for summary judgment. The defendant sufficiently established that it timely sent verification requests that remained outstanding. Therefore, the second cause of action was premature as payment on the claim was not overdue.
3/12/09 Park Slope Med. and Surg. Supply, Inc. a/a/o Maria E. Arias v. New York Cent. Mut. Fire Ins. Co.
Appellate Term, Second Department
Medical Necessity of Supplies is an Issue of Fact Due to Dueling Physician Opinions.
The trial court properly denied the defendant’s cross-motion for summary judgment as the plaintiff submitted a treating physician affidavit, contrary to the insurer’s peer reviewers’ reports, that the supplies provided were medically necessary.
3/10/09 Careplus Med. Supply, Inc. a/a/o Luis Gomez v. Selective Ins. Co.
Appellate Term, Second Department
New Jersey Law Applied to New York Accident After Center of Gravity Test Performed.
The sole issue in this case was whether New Jersey or New York no-fault law applied. If New York law applied then the defenses of lack of medical necessity must be timely raised. Whereas, if New Jersey law applied then the defense of lack of medical necessity may be raised at any time.
The Appellate Term applied the center of gravity or “grouping of contacts” to this case. Under the center of gravity approach, the court examined where the parties are domiciled or primarily conduct business; where the accident occurred; and where the vehicle involved in the accident is garaged. In this case, the accident occurred in New York. Yet, the insurance policy was negotiated and issued in New Jersey. The insureds lived in New Jersey and the motor vehicle involved in the accident was garaged and registered in New Jersey. Also, the operator of the vehicle, who is the eligible injured person in this action, resided in New Jersey. Accordingly, New Jersey law applies which also meant that lack of medical necessity could be raised by the insurer at any time.
3/10/09 PDG Psychological, P.C. a/a/o Cynthia Gonzales v. Progressive Cas. Ins. Co.
Appellate Term, Second Department
Plaintiff’s Witnesses Did Not Assist in Establishing Prima Facie Case at Trial.
Plaintiff failed to establish its prima facie case at trial and directed verdict was properly granted in the insurer’s favor. The plaintiff called a file clerk and the insurer’s litigation specialist to testify at trial. Neither witness provided testimony to sufficiently lay the foundation for admission of documents as business records. The insurer rested without calling a witness and moved for a directed verdict which was properly granted.
3/10/09 PDG Psychological, P.C. a/a/o Stanley Lesttle v. Travelers Ins. Co.
Appellate Term, Second Department
Yet Again, Plaintiff’s Witnesses Did Not Assist in Establishing Prima Facie Case at Trial.
At trial, the plaintiff’s witness, an individual employed by plaintiff at the time services were allegedly rendered to the eligible injured person, testified that she was not involved with billing the insurer. Yet, she saw documents like those plaintiff sought to admit into evidence. Upon objection to the admissibility of the documents, the trial court properly sustained the objection and did not permit the documents to be admitted into evidence.
3/10/09 Michael Daras, MD a/a/o Corey Moore v. GEICO Ins. Co.
Appellate Term, Second Department
Insurer Did Not Submit Sufficient Evidence to Support Denial on Failure to Attend IME.
The plaintiff’s motion for summary judgment should have been granted as the insurer failed to establish that its independent medical examination (“IME”) requests were timely mailed and that the eligible injured person failed to appear for a scheduled IME.
3/5/09 Dilon Med. Supply Corp. a/a/o Martine Dede v. Travelers Ins. Co.
Appellate Term, Second Department
Plaintiff’s Burden of Proof at Trial is Easily Achieved, But Not THAT Easily Achieved.
At trial, plaintiff did not call a single witness but moved for admission into evidence its notice to admit and the insurer’s response to same together with exhibits that were annexed to a prior summary judgment motion. The insurer objected and cross-moved for a directed verdict. The trial court properly granted the insurer’s motion for a directed verdict as it remains plaintiff’s burden to offer evidence in admissible form by calling a witness to lay the foundation to admit documents as business records.
3/24/09 Richard Morgan D.O., P.C. a/a/o Henry Ellis v. GEICO Indem. Co.
Appellate Term, Second Department
Failure to Provide Requested IME Report Can Not Result in Sanction of Loss of Defense to Insurer.
The court reminded the plaintiff in this case that even if the plaintiff could prove that it requested a copy of the independent medical examination report from the insurer and the insurer did not comply with the request there is no sanction against the insurer. In other words, the court cannot preclude the insurer from asserting the defense of lack of medical necessity simply because it did not comply with a request to provide a copy of the report.
PEIPER ON PROPERTY (and POTPOURRI)
Steven E. Peiper
[email protected]
Of Property
03/17/09 Goldstein v Massachusetts Mutual Life Ins. Co.
Appellate Division, First Department
Third Time NOT a Charm for Plaintiff in Disability Case
Plaintiff sustained nerve damage in a 1993 motor vehicle accident, which forced him to stop working as a chiropractor in 1994. Later, in 1995, plaintiff was diagnosed with chronic fatigue syndrome. Finally, in 1999, plaintiff was diagnosed with an anxiety disorder and with obsessive compulsive disorder. Given his ailments, plaintiff was, and still is, receiving disability benefits from Massachusetts Mutual.
However, in a 1999 action which was venued in New York County, plaintiff sought a declaratory judgment characterizing him as “presumptively disabled,” and waiving his obligation to submit monthly progress reports. That case was dismissed with the holding that plaintiff did not meet the policy’s definition of “presumptively disabled.”
Plaintiff tried again in a 2005 action, commenced in a different county, and again requested that the requirement that he remain under doctor’s care be waived. At this time, he also added a cause of action for negligent and intentional infliction of emotional distress. This action was dismissed upon Statute of Limitation grounds, and res judicata.
Not deterred, in 2007, back in New York County, plaintiff attempted to recover for emotional distress, as well as to finally obtain the waiver of the doctor’s care requirement. This action, as with the 2005 action, was dismissed on res judicata and collateral estoppel principles.
03/12/09 Potoff v Chubb Indemnity Ins. Co.
Appellate Division, First Department
Coverage for Clogged Drains is Triggered where the Damage Arose from….A Clogged Drain
Plaintiff commenced the instant action seeking coverage for water damage sustained at plaintiff’s apartment. The damage was caused by water buildup on the apartment’s roof, which was remedied by the removal of a plastic bag that had clogged a downspout.
The policy provided coverage for, among other things, the overflow from a plumbing system. In addition, the policy also covered water damage from a backup within a drain. In affirming the trial court’s decision finding coverage for the insured, the First Department noted that the loss obviously resulted from the clogged downspout, and not simply from a leaking roof as was argued by the carrier.
03/10/09 Travelers Indemnity Company v Zeff Design
Appellate Division, First Department
Without Establishing a Reason for Denial, Travelers’ Payment of a Claim could Not be Deemed to have been Volunteered
Travelers commenced this action in subrogation to recover costs it paid to its own insured, Liebovitz. In opposition to this action, defendant Z-One argued that Travelers’ action was barred by the waiver of subrogation clause found within the contract documents. However, this defense failed where, as here, the waiver of subrogation clause applied to that portion of the agreement which addressed Z-One’s subcontract relationships, and had no bearing on the Leibovitz/Z-One agreement.
In the alternative, Z-One argued that Travelers subrogation was barred because Travelers could have disclaimed coverage. As such, Z-One argued that Travelers was a volunteer in making payment to Liebovitz. However, where Z-One was unable to conclusively establish that the claim fell within an exclusion to coverage, Z-One’s volunteer argument failed.
And Potpourri
10/16/08 Insurance Department Opinion
Office of General Counsel
A Carrier May Not Issue a D&O Policy that Shifts the Duty to Defend to the Insured
We’ll jump in our time machine now, and travel back to October of 2008. You know, just before the Phillies phinally won the World Series after years of trying. On October 16, 2008, the Office of General Counsel at the Insurance Department issued an opinion regarding a carrier’s ability to write a Director’s and Officer’s liability policy that placed the duty to defend upon the insured. The proposal, presumably for a reduction in premium, would have required the insured to arrange for its own defense.
In reaching its conclusion, the Office of General Counsel first reiterated that the Insurance Department is provided, pursuant to Insurance Law § 2306, authority to assess and ultimately approve or disapprove all policy language. The opinion then goes on to state, as an initial issue, that Directors and Officers’ liability coverage is a form of personal injury liability coverage, and as such, falls within the proscriptions of Insurance Law § 1113. Importantly, the Insurance Department has long held that Insurance Law § 1113(a) requires a carrier to provided coverage for “legal defense costs associated with a covered claim.”
Interestingly, the Office of General Counsel opinion also relies upon the principles found within Insurance § 3420 for further support of the compulsory nature of the duty to defend. The opinion noted Section 3420’s requirement that a defense be provided regardless of the insured’s solvency at the time of the claim, the requirement that an action may be maintained by the claimant directly against the carrier (under certain circumstances) and the provision that a claimant’s notice to an agent of the carrier is notice to the carrier. The OGC opinion reasons that all three provisions recognize a public policy concern that an insured’s actions should not, necessarily, jeopardize the procured coverage.
Rather, the opinion reasons, the insurer may be directly liable for paying claims on behalf of the insured, and it should not be able to avoid this responsibility by requiring the insured to defend itself. The fear, as expressed by the OGC, would be that a carrier would attempt to deny coverage based upon the action (or inaction) of an insured controlling its own defense. The duty to defend, of course, involves not just the costs of litigation, but the requirement and cost of investigating claims and negotiating pre-trial settlements as well.
In addition, the Office of General Counsel also relied upon Regulation 107 (found at 11 NYCRR § 71.1 and 11 NYCRR § 71.2, respectively). Section 71.1 requires insurers to provide “a proper defense” to its insureds “regardless of cost.” While, Section 71.2 prohibits carriers from including a policy provision which would “otherwise limit the availability of coverage for legal defense costs.” Legal defense costs, it was noted, are defined in Section 71.1 as “attorney and all other litigation expenses that…arise from the defense of a specific claim.”
In turn, the opinion letter warned that the Insurance Department would not permit a carrier to contract out the duty to defend which, in the OGC’s mind, is a statutorily required. This is a change from some D&O policies which, in the past, have placed the duty to defend on the insureds. The change will require D&O carriers to now “absorb” the costs of overseeing and managing the defense of an insured. Likewise, as expressed in this opinion, a D&O carrier will also be obligated to defend all claims against an insured, instead of just those that fall within the scope of coverage contemplated by the policy.
Editor’s Note: A special thanks to Tom Zawistowski from Advisen who was kind enough to bring this to our attention.
EARL’S PEARLS
Earl K. Cantwell, II
[email protected]
The Corporate Attorney-Client Privilege
In yet another case dealing with the attorney-client privilege in the context of a corporation, a Federal District Court in Illinois ruled that the privilege applied to a communication from a company’s CFO to general counsel and other employees seeking information about the corporate Form 10-K filing. The court context was that purchasers of the stock of Aon Corporation brought a suit alleging failure to disclose commission and kick back arrangements under the Securities Exchange Act. The plaintiff sought to discover an email and attached memorandum sent by Aon’s CFO to the CEO, deputy general counsel, head of investor relations, corporate Controller and a member of the Controller’s division. The email asked the recipients to provide their thoughts on the memorandum, and counsel’s task was to provide legal advice on the disclosures under the federal securities laws. The court denied the plaintiffs’ motion to compel production of the documents. Roth v. Aon Corporation, 2009 U.S. Dist. LEXIS 14415 (N.D. Illinois 2009).
The essential court reasoning was that a Form 10-K requires extensive financial, legal and structured information about the company, and proper disclosure often involves legal consideration and analysis. Since the email at issue sought legal advice, the court upheld the attorney-client privilege, and further held that the privilege was not lost merely because some recipients of the documents were not lawyers. All of the non-lawyers who received the message were involved in preparation of the 10-K.
In short, the Court touched on the usual three rules or arguments that attach to the attorney-client privilege in the corporate context: Was the communication with respect to a bona fide legal matter? Did the communication seek legal advice and was the involvement of the attorney normal and expected as opposed to a ruse or guise? Was distribution of the communication to significant corporate personnel who had the need to seek and receive legal advice? These respective tests are commonly known as the “subject matter test”, “legal capacity test”, and the “control group test”.
The leading case in New York is Rossi v. Blue Cross and Blue Shield of New York, 73 N.Y.2d 588 (1989), where the Court analysis held that non-legal communications by staff attorneys are not protected by the attorney-client privilege, however in Rossi the court specifically ruled that the privilege applied to a memo written by a corporate staff attorney, sent to a corporate officer, and which involved advice regarding an imminent lawsuit. The attorney-client privilege is much more likely to be upheld and applied where the attorney is acting in a role as lawyer in obtaining information, analyzing issues, or advising corporate managers and committees. In contrast, the attorney-client privilege can be lost where the communication can be depicted as “simply business” or “business-related” as opposed to legal advice.
Likewise, the communication should be requested of the attorney and sent by the attorney in a legal capacity so that the context in which the communication is sent and received depicts legal input and analysis as opposed to business matters, particularly normal or routine business matters. It was interesting in the Aon Corporation case that the court held that the privilege was not lost because some of the recipients were not lawyers but rather corporate personnel involved in the 10-K filing process. Although a Form 10-K and related securities documents are often routine and regularly filed, the Court held that the nature of the lawyer’s involvement was a legal consideration as opposed to business.
Another key issue is that the communication is limited to high-level corporate individuals who have a need to communicate with counsel, have a corresponding need to receive information and opinions back from counsel, and then have the authority or ability to act upon or implement the advice. Several cases have held that the attorney-client privilege applies best (if not only) to communications between the corporate attorneys and top management, i.e., the “control group”, who have the ability to make final decisions. The privilege may also extend to a middle tier of employees when they advise top management in a particular area, if their advice is part of the decision-making process, or if they and their group, plant or division are directly involved in some legal matter. Some cases have emphasized this “control group” test, while others have rejected it or merely regard it as only one factor in the analysis.
In order to preserve the attorney-client relationship in a corporate or business context, it is best and most advisable to:
- Make sure to consult with in-house counsel only on matters that truly involve or need legal advice and attention. Involving corporate counsel in strictly business negotiations or matters may be a good idea company-wise, but be aware that it runs the risk of defeating the attorney-client privilege.
- Make sure that communications sent to and from corporate counsel, both written and oral, are for the purpose of obtaining legal advice so that the company and the lawyer can credibly claim that the communication was requested and rendered in his or her capacity as a lawyer and not simply as part of the business decision-making process or as just another person on the email chain.
- Try to limit communications with corporate counsel to senior management and “control group” personnel, and perhaps other corporate employees who are directly involved in a legal matter because of the nature of the case, the involvement of people or locations under their jurisdiction, etc. Limiting communications to higher level management and “control group” personnel, while not guaranteeing preservation of the attorney-client privilege, will enhance the argument in favor of the privilege.
- Before deciding whether to “run this by the lawyer’, make sure it is something that is worthy or deserving of legal attention, make sure that the lawyer is being asked to render legal as opposed to business, advice, and make sure the communication is sent to and from the lawyer and higher level corporate management who have the position and a reason to communicate directly with counsel.
Scott M. Duquin
[email protected]
LEAD: The Lingering Litigation
One more issue on hiatus
3/13/09 Emhart Industries v. Home Insurance
First Circuit Court of Appeals
Insurer Assessed Total Costs Of Defense Of Underlying EPA Action, But Only Up To Date Of Jury Finding That Insurer Did Not Owe Duty To Indemnify
This insurance coverage dispute arose from efforts by the Environmental Protection Agency ("EPA") to remediate contamination at a Superfund site in North Providence, Rhode Island. In 2000, EPA designated Emhart Industries, Inc. a Potentially Responsible Party ("PRP") for the cleanup costs of the Site under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et seq. Emhart sued its insurers, Century Indemnity Company, OneBeacon America Insurance Company, and The North River Insurance Company, to cover its cleanup and defense costs. After trial, a jury found that Century, OneBeacon and North River did not owe Emhart coverage for cleanup costs. However, the federal district court awarded summary judgment for Emhart on its claim that Century owed it a duty to defend in the EPA matter. The district court later found that Century breached that duty and assessed the total costs of defense of the underlying EPA action as damages, but only up to the date of the jury's finding that Century did not owe a duty to indemnify. Century appealed the allowance of summary judgment in Emhart's favor as to Century's duty to defend. Century contended that it was not obligated to pay all of the defense costs incurred up to the jury finding. Emhart cross-appealed, contending that it was entitled to total indemnity costs for Century's breach of the duty to defend, and that the district court had committed various errors with respect to the jury verdict. The First Circuit affirmed the district court with respect to all issues on appeal, and awarded costs to the prevailing parties.
Submitted by: David W. Zizik (Zizik, Powers, O’Connell, Spaulding & Lamontagne, P.C.)
3/09/09 Chalfonte Condominium Apartment Ass’n, Inc. v. QBE Ins. Corp.
Eleventh Circuit Court of Appeals
Property Insurance: Eleventh Circuit Certifies Bad Faith Questions to the Florida Supreme Court
In 2005, Hurricane Wilma caused significant damage to property owned by Chalfonte Condominium Apartment Association, Inc. (“Chalfonte”). QBE Insurance Corporation (“QBE”) insured Chalfonte under a property policy. Chalfonte was dissatisfied with QBE’s investigation and processing of its claim, so Chalfonte filed an action in federal court alleging breach of the implied covenant of good faith and fair dealing and other claims. A judgment of more than $7 million was ultimately awarded to Chalfonte, and QBE appealed. The Eleventh Circuit noted that Florida does not recognize a common law first-party action for bad faith failure to settle a claim under an insurance contract, but Florida does provide for a statutory first-party action for bad faith failure to settle a claim under an insurance contract. However, the Eleventh Circuit was not convinced that Florida courts have definitively concluded that an insured may bring a bad faith claim for an insurer’s failure to investigate and assess its insured’s claim within a reasonable period of time. Nor have Florida courts determined whether the bifurcation requirement applicable to statutory bad faith claims would apply to such a bad faith claim. Because questions of Florida law were outcome-determinative, the Eleventh Circuit certified the issues as questions to the Florida Supreme Court. The Eleventh Circuit further certified a question to the Florida Supreme Court as to what penalty an insurer must pay for non-compliance with a statutory provision requiring that hurricane deductibles be disclosed in a particular font and format.
Submitted by: Bruce D. Celebrezze, Esq. & Jamison R. Narbaitz, Esq. of Sedgwick, Detert, Moran & Arnold LLP
REPORTED DECISIONS
Hernandez v. American Transit Insurance Company
Jose R. Mendez, Rego Park, N.Y., for appellants.
Marjorie E. Bornes, New York, N.Y., for respondent.
DECISION & ORDER
In an action pursuant to Insurance Law § 3420(a)(2) to recover on two unsatisfied judgments entered against the defendant's insureds, the plaintiffs appeal from a judgment of the Supreme Court, Queens County (Leviss, J.H.O.), entered February 29, 2008, which, after a nonjury trial, is favor of the defendant and against them dismissing the complaint.
ORDERED that the judgment is reversed, on the law, with costs, and the matter is remitted to the Supreme Court, Queens County, for the entry of a judgment in favor of the plaintiffs and against the defendant.
In this action pursuant to Insurance Law § 3420(a)(2), the plaintiffs made out their prima facie case by demonstrating that they each had obtained a judgment against each of the tortfeasors, served the insurance company with a copy of the judgment, and awaited payment for 30 days (see Lang v Hanover Ins. Co., 3 NY3d 350, 352). Since the judgments are presumptively valid (see Knickerbocker Trust Co. v Oneonta, Cooperstown & Richfield Springs Ry. Co., 201 NY 379, 384; Boorman v Deutsch, 152 AD2d 48, 52), the burden was on the defendant to establish its claim that the judgments are invalid. The defendant failed, however, to establish any invalidity in the judgments that would be a defense to enforcement of the judgments against it (see Braddy v Allcity Ins. Co., 282 AD2d 637, 638; Vaccarino v Allstate Ins. Co., 270 AD2d 411). As a result, the Supreme Court erred in awarding judgment to the defendant and should have awarded judgment in favor of the plaintiffs.
Matter of Autoone Insurance Co., v. Schulere
David J. Tetlak, Huntington Station, N.Y. (Albert J. Galatan of
counsel), for appellant.
Peknic, Peknic & Schaefer, LLC, Long Beach, N.Y. (Sean W.
Schaefer of counsel), for respondent
Integer National Insurance Company.
DECISION & ORDER
In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of a claim for uninsured motorist benefits, the petitioner Autoone Insurance Company appeals from a judgment of the Supreme Court, Kings County (Marano, J.H.O.), which, after a hearing, in effect, denied the petition and dismissed the proceeding based on a finding that the offending vehicle was uninsured on the date of the accident.
ORDERED that the judgment is reversed, on the law, with costs, the petition is granted, and the arbitration is permanently stayed.
The petitioner Autoone Insurance Company (hereinafter Autoone) sought a permanent stay of arbitration of an uninsured motorist claim on the ground that the offending vehicle was insured on the date of the accident by the respondent Integer National Insurance Company (hereinafter Integer). A framed issue hearing was held to determine whether, prior to the date of the accident, Integer had validly canceled the policy that it had written for the offending vehicle. The parties agreed that North Carolina law applied to this question. The Supreme Court concluded that Integon's "cancellation of [the] insurance policy was proper" and, in effect, dismissed the proceeding. We reverse and grant the stay of arbitration.
Integer argues that a December 1, 2005, cancellation notice allegedly sent to its insured by his insurance premium finance company was effective. However, Integer failed to present evidence at the hearing that the insurance premium finance agreement between its insured and his insurance premium finance company contained a power of attorney or other authority enabling it to cancel the insured's insurance contract under North Carolina law (see NCGSA § 58-35-85; cf. Badillo v State Farm Mutual Auto Ins. Co., 114 AD2d 394). In addition, Integer failed to present evidence at the hearing sufficient to establish that either the cancellation notice dated December 1, 2005, or any of the cancellation notices it allegedly sent its insured were, in fact, properly mailed (see Lumberman's Mut. Cas. Co. v Gamble, 250 AD2d 540; Federal Ins. Co. v Kimbrough, 116 AD2d 692). Thus, the Supreme Court erred in finding that Integer had effectively cancelled the insured's policy prior to the subject accident which occurred on January 7, 2006.
The parties' remaining contentions either have been rendered academic by our determination or are without merit.
Gentilella v. Board of Education of Wantagh Union Free School District
Sacks and Sacks, LLP, New York, N.Y. (Scott N. Singer of
counsel), for appellant.
Congdon, Flaherty, O'Callaghan, Reid, Donlon, Travis &
Fishlinger, Uniondale, N.Y. (Gregory A.
Cascino and Kathleen D. Foley of
counsel), for respondent.
DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals (1) from an order of the Supreme Court, Nassau County (Winslow, J.), dated August 10, 2007, which granted the defendants' motion for summary judgment dismissing the complaint on the ground that he did not sustain a serious injury within the meaning of Insurance Law § 5102(d), and (2), as limited by his brief, from so much of an order of the same court dated February 28, 2008, as denied that branch of his motion which was for leave to renew his opposition to the defendants' prior motion and, upon reargument, adhered to the original determination.
ORDERED that the appeal from the order dated August 10, 2007, is dismissed, as that order was superseded by that portion of the order dated February 28, 2008, made upon reargument; and it is further,
ORDERED that the order dated February 28, 2008, is affirmed insofar as appealed from; and it is further,
ORDERED that one bill of costs is awarded to the defendants.
This action arises from a two-car motor vehicle accident which occurred on September 23, 2005, on the Long Island Expressway in Queens, in which the plaintiff allegedly sustained injuries to his cervical and lumbar spines. It is undisputed that the plaintiff had previously injured those parts of his body in a motor vehicle accident on November 25, 2001. After the plaintiff commenced the present action, the defendants moved for summary judgment dismissing the complaint on the ground that the plaintiff's alleged injuries predated the subject motor vehicle accident. The medical evidence which the defendants submitted in support of the motion established, prima facie, that any injuries that the plaintiff sustained in the accident of September 23, 2005, were not serious within the meaning of Insurance Law § 5102(d) (see Toure v Avis Rent A Car Sys., 98 NY2d 345, 352; Gaddy v Eyler, 79 NY2d 955, 956-957). Notably, the affirmed reports prepared by Dr. Tantleff, the defendants' expert radiologist, which were submitted in support of the motion, found that magnetic resonance imaging (hereinafter MRI) studies of the plaintiff's cervical and lumbar spine shortly after the 2001 accident and years prior to the subject one, revealed "longstanding chronic degenerative discogenic disease" in both regions of the plaintiff's spine. Moreover, upon reviewing MRI studies of both the cervical and lumbar spine taken shortly after the present accident and comparing them with the earlier set of MRI studies taken prior to the present accident, Dr. Tantleff found "no definable interval change." The admissible medical evidence which the plaintiff submitted in opposition to the motion failed to raise a triable issue of fact (see CPLR 3212). While Dr. Hausknecht acknowledged the existence of the earlier accident and the plaintiff's prior chiropractic treaatment, he never indicated that he reviewed any of plaintiff's medical records from the earlier accident and apparently merely took the plaintiff's word for the fact that he had recovered from any injuries sustained therein prior to the occurrence of the subject accident (see Penaloza v Chavez, 48 AD3d 654). Therefore, the Supreme Court properly granted the defendants' motion for summary judgment dismissing the complaint and, upon reargument, properly adhered to that determination (see Haggery v Quast, 48 AD2d 629).
Since the new information submitted by the plaintiff in support of that branch of his motion which was for leave to renew provided no basis for changing the court's original determination, the court properly denied that branch of the motion (see Worrell v Parkway Estates, LLC, 43 AD3d 436).
Marshak v. Migliore
John P. Humphreys, Melville, N.Y. (Scott W. Driver of counsel),
for respondents.
DECISION & ORDER
In an action to recover damages for personal injuries, etc., the plaintiffs appeal from an order of the Supreme Court, Nassau County (Spinola, J.), dated September 19, 2007, which granted the defendants' motion for summary judgment dismissing the complaint on the ground that the plaintiff Mark A. Marshak did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed, on the law, with costs, and the defendants' motion for summary judgment dismissing the complaint is denied.
The Supreme Court erred in concluding that the defendants met their prima facie burden of showing that the plaintiff Mark A. Marshak (hereinafter the injured plaintiff) did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345, 350-351; Gaddy v Eyler, 98 NY2d 955, 956-957). In support of their motion, the defendants relied upon, inter alia, the affirmed medical report of their examining orthopedic surgeon, Dr. Mauro M. Cataletto, dated November 29, 2006. In this report, while Dr. Cataletto set forth range-of-motion findings with respect to the injured plaintiff's lumbar spine as of November 29, 2006, he failed to compare those findings to what is normal (see Perez v Fugon, 52 AD3d 668, 669; Page v Belmonte, 45 AD3d 825, 825-26; Fleury v Benitez, 44 AD3d 996, 997). Moreover, when he set forth the injured plaintiff's supine straight leg raising findings he noted that the injured plaintiff could raise his right leg to 80 degrees and his left leg to only 60 degrees. This noted a clear limitation, the full extent of which is unknown since he failed to compare any of his range of motion findings to what is normal (see Gaccione v Krebs, 53 AD3d 524, 525; Giammanco v Valerio, 47 AD3d 674, 675; Coburn v Samuel, 44 AD3d 698, 699; Iles v Jonat, 35 AD3d 537, 538; McCrary v Street, 34 AD3d 768, 769; Whittaker v Webster Trucking Corp., 33 AD3d 613; Yashayev v Rodriguez, 28 AD3d 651, 652). Absent such comparative quantification, the Court cannot conclude that the decreased lumbar range of motion noted was mild, minor, or slight so as to be considered insignificant within the meaning of the no-fault statute (see Webb v Keyspan Corp., 56 AD3d 464; Yashayev v Rodriguez, 28 AD3d at 652).
Since the defendants failed to satisfy their initial burden on their motion, it is not necessary to consider whether the plaintiffs' papers in opposition were sufficient to raise a triable issue of fact (see Perez v Fugon, 52 AD3d at 669; Gaccione v Krebs, 53 AD3d at 525; Coscia v 938 Trading Corp., 283 AD2d 538).
Neuburger v. Sidoruk
Glinkenhouse, Floumanhaft & Queen, Cedarhurst, N.Y. (Philip
Floumanhaft of counsel), for appellants.
Bryan M. Rothenberg, Hicksville, N.Y. (Fiedelman & McGaw
[Dawn C. DeSimone], of counsel), for
respondents Igor Sidoruk and Grazyna
Sidoruk.
Russo & Apoznanski, Westbury, N.Y. (Susan J. Mitola of
counsel), for respondents Adam Kugler
and Lauran Kugler.
John P. Humphreys, Melville, N.Y. (Dominic P. Zafonte of
counsel), for respondents Peter Nguyen
and Huy Nguyen.
DECISION & ORDER
In an action to recover damages for personal injuries, etc., the plaintiffs appeal, as limited by their brief, from so much of an order of the Supreme Court, Suffolk County (Pitts, J.), dated September 26, 2007, as, upon reargument, adhered to its original determination in an order dated February 20, 2007, granting those branches of the separate motions of the defendants Igor Sidoruk and Grazyna Sidoruk, the defendants Adam Kugler and Lauran Kugler, and the defendants Peter Nguyen and Huy Nguyen, which were for summary judgment dismissing the complaint insofar as asserted against them on the ground that the plaintiff Catherine Neuburger did not sustain a serious injury within the meaning of Insurance Law § 5102(d), and denied that branch of their motion which was for leave to renew.
ORDERED that the appeal from so much of the order dated September 26, 2007, as denied that branch of the plaintiff's motion which was for leave to renew is dismissed as academic, in light of our determination on the appeal from so much of the order as was made upon reargument; and it is further,
ORDERED that the order dated September 26, 2007, is reversed insofar as reviewed, upon reargument, the order dated February 20, 2007, is vacated, and thereupon, those branches of the separate motions of the defendants Igor Sidoruk and Grazna Sidoruk, the defendants Adam Kugler and Lauran Kugler, and the defendants Peter Nguyen and Huy Nguyen, which were for summary judgment dismissing the complaint insofar as asserted against them are denied; and it is further,
ORDERED that one bill of costs are awarded to the plaintiffs.
As a general rule, we do not consider any issue raised on a subsequent appeal that was raised, or could have been raised, in an earlier appeal that was dismissed for lack of prosecution, although we have the inherent jurisdiction to do so (see Rubeo v National Grange Mut. Ins. Co., 93 NY2d 750; Bray v Cox, 38 NY2d 350). Here, the plaintiffs appealed from the order dated February 20, 2007, which granted those branches of the separate motions of the defendants Igor Sidoruk and Grazyna Sidoruk, the defendants Adam Kugler and Lauran Kugler, and the defendants Peter Nguyen and Huy Nguyen which were for summary judgment dismissing the complaint insofar as asserted against them on the ground that the plaintiff Catherine Neuburger did not sustain a serious injury within the meaning of Insurance Law § 5102(d). In the order appealed from dated September 26, 2007, the Supreme Court, inter alia, granted that branch of the plaintiffs' motion which was for leave to reargue and, upon reargument, adhered to the original determination. Meanwhile, the earlier appeal was dismissed by decision and order on motion of this Court dated March 4, 2008, for failure to perfect in accordance with the rules of this Court (see 22 NYCRR 670.8[h]). While the better practice would have been for the plaintiffs to withdraw the prior appeal, rather than abandon it, nonetheless, we exercise our discretion to review the issues raised on the appeal from so much of the order dated September 26, 2007, as was made upon reargument (see DiGiaro v Agrawal, 41 AD3d 764; Cesar v Highland Care Ctr., Inc., 37 AD3d 393).
On reargument, the Supreme Court should not have adhered to its original determination awarding the defendants summary judgment. The defendants failed to meet their prima facie burdens of showing that the plaintiff Catherine Neuburger did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accidents (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 990). The bills of particulars served on the defendants all alleged that the injured plaintiff had sustained a medically-determined injury of a nonpermanent nature which prevented her from performing substantially all of the material acts constituting her usual and customary activities for not less then 90 days during the 180 days immediately following the accident (hereinafter the 90/180 day category). The defendants' examining orthopedist and neurologist conducted separate examinations of the injured plaintiff over three years after the subject accidents. Those experts noted in their respective reports that the injured plaintiff missed 18 months of work as a result of the injuries sustained in the subject accidents. Neither physician related his medical findings to the 90/180 day category of serious injury. Thus, the defendants failed to make a prima showing that the injured plaintiff had no injury in the 90/180 category (see Shaw v Jalloh, 57 AD3d 647; Scinto v Hoyte, 57 AD3d 646; Ali v Rivera, 52 AD3d 445; Yung v Eager, 51 AD3d 638; Tinsley v Bah, 50 AD3d 1019).
Since the defendants failed to satisfy their prima facie burdens, it is unnecessary to consider whether the papers submitted by the plaintiffs were sufficient to raise a triable issue of fact (see Shaw v Jalloh, 57 AD3d 647; Scinto v Hoyte, 57 AD3d 646; Ali v Rivera, 52 AD3d 445, 446).
In light of the foregoing, the plaintiffs' contentions regarding the denial of that branch of their motion which was for leave to renew has been rendered academic.
Shevardenidze v. Vaiana
Abamont & Associates (Congdon, Flaherty, O'Callaghan, Reid,
Donlon, Travis & Fishlinger, Uniondale, N.Y. [Kathleen D.
Foley], of counsel), for appellant.
DECISION & ORDER
In an action, inter alia, to recover damages for personal injuries, the defendant Raymond Vaiana appeals, as limited by his brief, from so much of an order of the Supreme Court, Queens County (Dorsa, J.), dated March 31, 2008, as denied his cross motion, in effect, for summary judgment dismissing the first, second, third, and fourth causes of action insofar as asserted against him on the ground that none of the plaintiffs sustained a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and the cross motion, in effect, for summary judgment dismissing the first, second, third, and fourth causes of action insofar as asserted against Raymond Vaiana is granted.
This action arises from a two-car accident in which a motor vehicle driven by the appellant rear-ended the motor vehicle occupied by the four plaintiffs. In the first through fourth causes of action in their complaint, each of the plaintiffs alleged that they sustained serious injuries as a result of the accident. After discovery, the appellant cross-moved, in effect, for summary judgment dismissing those causes of action on the ground that none of the plaintiffs sustained a serious injury within the meaning of Insurance Law § 5102(d). The Supreme Court denied the cross motion. We reverse.
Contrary to the Supreme Court's determination, the appellant established a prima facie case that none of the plaintiffs sustained a serious injury within the meaning of Insurance Law § 5102(d) through his submission of their deposition testimonies and the affirmed medical reports of his expert orthopedist and neurologist, who examined the plaintiffs and concluded that they were not disabled (see Toure v Avis Rent A Car Sys., 98 NY2d 345, 352; Gaddy v Eyler, 79 NY2d 955, 956, 957; Kearse v New York City Tr. Auth., 16 AD3d 45, 51-52). The appellant's examining experts concluded, based on objective range of motion tests, that the plaintiffs had full range of motion in, inter alia, their cervical and lumbar spines.
In opposition to the cross motion, the plaintiffs failed to demonstrate the existence of a triable issue of fact. The only admissible medical evidence submitted by the plaintiffs in opposition to the cross motion were affirmed medical reports prepared by Dr. Rondolph Rosarion. As Dr. Rosarion did not examine the plaintiffs until more than three years after the subject motor vehicle accident, the limitations he found in the plaintiffs' ranges of motion were not contemporaneous with the subject accident (see Morris v Edmond, 48 AD3d 432, 433; D'Onofrio v Floton, Inc., 45 AD3d 525). Therefore, the Supreme Court should have granted the appellant's cross motion.
Gristede's Operating Corp., v. Axis Specialty Insurance Company
Proskauer Rose LLP, New York (Seth B. Schafler of counsel),
for appellants.
Kaufman Borgeest & Ryan LLP, New York (Joan M. Gilbride
of counsel), for respondent.
Order, Supreme Court, New York County (Rolando T. Acosta, J.), entered December 19, 2007, which granted defendant's motion to dismiss the complaint, unanimously modified, on the law, to declare that defendant is not obligated to indemnify plaintiff against any claims made in the underlying class action, and otherwise affirmed, without costs.
While "an insurer's duty to defend and to pay defense costs under liability insurance policies must be construed broadly in favor of the policyholder" (Fed. Ins. Co. v Kozlowski, 18 AD3d 33, 41 [2005] [citation omitted]), the "existence of the duty is dependent upon whether sufficient facts are stated so as to invoke coverage under the policy" (American Home Assur. Co. v Port Auth. of N.Y. & N.J., 66 AD2d 269, 278 [1979]). The policy here did not cover plaintiff against the claims alleged in the underlying class action, and defendant thus had no duty to advance defense costs (see SociÉtÉ GÉnÉrale v Certain Underwriters at Lloyd's, London, 1 AD3d 164 [2003]). Rejection of plaintiffs' cause of action for a declaration required that the court declare in favor of defendant, and we modify accordingly (Decana, Inc. v Contogouris, 55 AD3d 325, 326 [2008]).
We have considered plaintiffs' remaining contentions and find them unavailing.
Ferber v. Madorran
Richard T. Lau, Jericho, N.Y. (Gene W. Wiggins of counsel), for
appellant Joseph Rawas.
Baker, McEvoy, Morrissey & Moskovits, P.C., New York,
N.Y. (Stacy R. Seldin of counsel), for
appellants Sweet Irene Transportation
Co., Inc., and Afridi J. Kausar.
Mallilo & Grossman, Brooklyn, N.Y. (Beth J. Girsch of
counsel), for respondent.
DECISION & ORDER
In an action to recover damages for personal injuries, the defendant Joseph Rawas appeals, as limited by his brief, and the defendants Sweet Irene Transportation Co., Inc., and Afridi J. Kausar separately appeal, from so much of an order of the Supreme Court, Kings County (Jacobson, J.), dated April 8, 2008, as denied those branches of their respective motions which were for summary judgment dismissing so much of the plaintiff's complaint as sought to recover damages based on alleged serious injuries to her cervical spine, head, and right knee on the ground that she did not sustain such serious injuries within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed insofar as appealed from, with one bill of costs payable by the plaintiff to the appellants appearing separately and filing separate briefs, and those branches of the motion of the defendant Joseph Rawas, and the separate motion of the defendants Sweet Irene Transportation Co., Inc., and Afridi J. Kausar, which were for summary judgment dismissing so much of the plaintiff's complaint as sought to recover damages based on alleged serious injuries to her cervical spine, head, and right knee are granted.
The appellants met their prima facie burdens of establishing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In opposition, the Supreme Court erred in finding that the plaintiff raised triable issues of fact as to whether she sustained a serious injury to her cervical spine, head (in the form of headaches), or right knee within the meaning of Insurance Law § 5102(d) as a result of the subject accident. In opposing the motions, the plaintiff principally relied upon the affirmation of her treating doctor, Dr. Leo E. Batash. His affirmation was without probative value since he clearly relied on unsworn reports of others in reaching his conclusions (see Sorto v Morales, 55 AD3d 718; Malave v Basikov, 45 AD3d 539; Furrs v Griffith, 43 AD3d 389; Friedman v U-Haul Truck Rental, 216 AD2d 266, 267).
The affirmed magnetic resonance imaging (hereinafter MRI) report of the plaintiff's cervical spine merely established that the plaintiff had a bulging disc at C4-5 as of March 31, 2003. The mere existence of a herniated or bulging disc is not evidence of a serious injury in the absence of objective evidence of the extent of the alleged physical limitations resulting from the disc injury and its duration (see Sealy v Riteway-1, Inc., 54 AD3d 1018; Kilakos v Mascera, 53 AD3d 527; Cerisier v Thibiu, 29 AD3d 507; Bravo v Rehman, 28 AD3d 694; Kearse v New York City Tr. Auth., 16 AD3d 45). The affidavit of the plaintiff was insufficient to meet that requirement (see Rabolt v Park, 50 AD3d 995; Young Soo Lee v Troia, 41 AD3d 469; Nannarone v Ott, 41 AD3d 441). It should further be noted that Dr. Howard Gelber, the radiologist who interpreted the March 2003 cervical spine MRI, failed to offer any opinion on the cause of the bulging disc he noted therein (see Collins v Stone, 8 AD3d 321, 322).
The plaintiff failed to submit competent medical evidence that the injuries she allegedly sustained in the subject accident rendered her unable to perform substantially all of her daily activities for not less than 90 days of the first 180 days subsequent to the subject accident (see Rabolt v Park, 50 AD3d 995; Roman v Fast Lane Car Serv., Inc., 46 AD3d 535; Sainte-Aime v Ho, 274 AD2d 569).
Raleigh v. Ram
Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Stacy R. Seldin of counsel), for appellants.
Adam D. White, New York, N.Y., for respondent.
DECISION & ORDER
In an action to recover damages for personal injuries, the defendants Roda Ram and Satwant Singh appeal from an order of the Supreme Court, Queens County (Taylor, J.), dated August 4, 2008, which denied their motion for summary judgment dismissing the complaint insofar as asserted against them on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d).
ORDERED that the order is reversed, on the law, with costs, and the motion of the defendants Roda Ram and Satwant Singh for summary judgment dismissing the complaint insofar as asserted against them is granted.
The appellants submitted an affirmation of their examining physician stating that, based upon his examination of the plaintiff, it was his opinion that the plaintiff had no permanent injury, limitation, or restriction. The physician tested the range of motion of, inter alia, the plaintiff's left shoulder, and found it to be normal. Moreover, he set forth the specifics of his measurements as well as the norms against which he compared them. Together with the remaining evidence submitted by the appellants, this was sufficient to establish the appellants' prima facie entitlement to judgment as a matter of law (see Gaddy v Eyler, 79 NY2d 955; Luckey v Bauch, 17 AD3d 411; Sims v Megaris, 15 AD3d 468; Check v Gacevk, 14 AD3d 586).
The plaintiff's submissions in opposition failed to raise a triable issue of fact. Significantly, the plaintiff's primary physician failed to reconcile her conclusion that the plaintiff sustained a tear to his left shoulder, which concomitantly limited the shoulder's range of motion, with the operative report of the orthopedic surgeon who performed arthroscopic surgery on the left shoulder two months after the accident, who not only found no limitations of motion, but also found no evidence of a tear or other condition attributable to the accident (see Carrillo v DiPaola, 56 AD3d 712; Vishnevsky v Glassberg, 29 AD3d 680; Doyle v Renz, 297 AD2d 719).
Accordingly, the appellants' motion for summary judgment dismissing the complaint insofar as asserted against them should have been granted.
Ramirez v. Khan
Baker, McEvoy, Morrissey & Moskovits, P.C., New York, N.Y.
(Stacy R. Seldin of counsel), for respondent.
DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals, as limited by his brief, from so much of an order of the Supreme Court, Queens County (Rosengarten, J.), entered September 24, 2007, as denied that branch of his motion which was for leave to renew his opposition to the defendant's prior motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d), which had been granted in an order entered April 24, 2007.
ORDERED that the order entered September 24, 2007, is affirmed insofar as appealed from, with costs.
The Supreme Court providently exercised its discretion in denying that branch of the plaintiff's motion which was for leave to renew his opposition to the defendant's motion for summary judgment (see Renna v Gullo, 19 AD3d 472). A motion for leave to renew "shall be based upon new facts not offered on the prior motion that would change the prior determination" (CPLR 2221[e][2]) and "shall contain reasonable justification for the failure to present such facts on the prior motion" (CPLR 2221[e][3]; see Dinten-Quiros v Brown, 49 AD3d 588; Madison v Tahir, 45 AD3d 744). While it may be within the court's discretion to grant leave to renew upon facts known to the moving party at the time of the original motion (see J.D. Structures v Waldbaum, 282 AD2d 434; Cronwall Equities v International Links Dev. Corp., 255 AD2d 354), a motion for leave to renew " is not a second chance freely given to parties who have not exercised due diligence in making their first factual presentation'" (Renna v Gullo, 19 AD3d at 472, quoting Rubinstein v Goldman, 225 AD2d 328, 329; see also O'Dell v Caswell, 12 AD3d 492; Hart v City of New York, 5 AD3d 438; Carota v Wu, 284 AD2d 614). In this case, the plaintiff failed to provide reasonable justification for the failure to include the affirmation of Dr. Robert Scott Schepp on the prior motion (see Renna v Gullo, 19 AD3d at 472). In any event, that affirmation would not have changed the prior determination awarding summary judgment to the defendant (id.).
Walker v. Public Administrator of Suffolk County
John P. Humphreys, Melville, N.Y. (Scott W. Driver of counsel),
for defendants-respondents Gregory Zephirin and Rose Esther
Compere.
Brian J. McGovern, LLC, New York, N.Y. (Alison M. K. Lee
of counsel), for nonparty-respondent
Estate of Isaac Odom.
DECISION & ORDER
In an action to recover damages for personal injuries, the plaintiff appeals from (1) an order of the Supreme Court, Suffolk County (Baisley, Jr., J.), dated January 10, 2008, which granted the motion of the nonparty Estate of Isaac Odom made, in effect, on behalf of the defendant Public Administrator of Suffolk County for the Estate of Isaac Odom, and the separate motions of the defendants Gregory Zephirin and Rose Esther Compere, for summary judgment dismissing the complaint insofar as asserted against them on the ground that he did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident, and (2) an order of the same court dated May 20, 2008, which denied his motion for leave to reargue.
ORDERED that the appeal from the order dated May 20, 2008, is dismissed, as no appeal lies from an order denying reargument; and it is further,
ORDERED that the order dated January 10, 2008, is reversed, on the law, and the motion of the nonparty Estate of Isaac Odom, made, in effect, on behalf of the defendant Public Administrator of Suffolk County for the Estate of Isaac Odom, and the separate motion of the defendants Gregory Zephirin and Rose Esther Compere for summary judgment dismissing the complaint insofar as asserted against them on the ground that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) are denied; and it is further,
ORDERED that one bill of costs is awarded to the plaintiff, payable by the defendants-respondents and nonparty-respondent appearing separately and filing separate briefs.
In support of their respective motions, the respondents relied on the same submissions. These submissions, contrary to the determination of the Supreme Court, failed to meet the respondents' respective prima facie burdens of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In support of their respective motions, the respondents relied upon, inter alia, the affirmed medical reports of Dr. Lawrence Miller, an orthopedic surgeon, and Dr. S. Farkas, a neurologist. While Dr. Miller noted in his report that the plaintiff could bend forward in his lumbar spine to more than 60 degrees, he failed to compare that finding to what is normal (see Page v Belmonte, 45 AD3d 825; Malave v Basikov, 45 AD3d 539; Fleury v Benitez, 44 AD3d 996; Nociforo v Penna, 42 AD3d 514). Moreover, he also noted that the plaintiff could carry out bilateral straight-leg raising to more than 45 degrees, yet failed to compare that finding to what is normal. Although Dr. Farkas noted in his affirmed medical report that the plaintiff could abduct his right shoulder to 170 degrees, which Dr. Farkas deemed normal, he further noted that internal rotation of the right shoulder was to "L3," and failed to compare that finding to what is normal.
Since the respondents failed to meet their respective prima facie burdens, it is unnecessary to consider whether the papers submitted by the plaintiff were sufficient to raise a triable issue of fact (see Page v Belmonte, 45 AD3d 825; Coscia v 938 Trading Corp., 283 AD2d 538).
Appalachian Insurance Company v. Riunione Adriatic Di Sicurata
McCarter & English, LLP, New York (Brian J. Osias of
counsel), for appellant.
White and Williams LLP, Philadelphia, PA (Daniel M. Isaacs of
counsel), for Century Indemnity Company, Pacific Employers
Insurance Company and One Beacon American Insurance
Company, respondents.
Ford Marrin Esposito Witmeyer & Gleser, L.L.P., New York
(Elizabeth M. DeCristofaro of counsel), for Continental
Casualty Company, Continental Insurance Company and Pacific
Insurance Company, respondents.
Rivkin Radler LLP, Hackensack, NJ (Brian R. Ade of counsel),
for Federal Insurance Company, respondent.
Landman Corsi Ballaine & Ford, P.C., New York (Michael L.
Gioia of counsel), for Republic Insurance Company, respondent.
Order, Supreme Court, New York County (Bernard J. Fried, J.), entered July 18, 2008, which granted defendants-respondents' motions for partial summary judgment, denied defendant-appellant General Electric (GE)'s cross motion for partial summary judgment, and determined that New York law governs the insurance coverage issues raised in this action, unanimously affirmed, with costs.
We have held that a contract of liability insurance is "governed by the law of the state which the parties understood was to be the principal location of the insured risk ...'" (Certain Underwriters at Lloyd's, London v Foster Wheeler Corp., 36 AD3d 17, 22-23 [2006], affd 9 NY3d 928 [2007]), that "where it is necessary to determine the law governing a liability insurance policy covering risks in multiple states, the state of the insured's domicile should be regarded as a proxy for the principal location of the insured risk" (id. at 24) and that a corporate insured's domicile is the state of its principal place of business (id. at 25). The contracts of liability insurance at issue here, which do not contain choice-of-law clauses and cover risks that are spread through multiple states, were purchased by GE, which, having obtained rulings in its favor as to its principal place of business (see e.g. Gafford v General Elec. Co., 997 F2d 150, 161-163 [6th Cir 1993]; Northeast Nuclear Energy Co. v General Elec. Co., 435 F Supp 344, 347-348 [D Conn 1977]), is judicially estopped from denying that its principal place of
business is New York (see e.g. D & L Holdings, LLC v RGC Goldman Co., 287 AD2d 65, 71 [2001], lv denied 97 NY2d 611 [2002]; Bankers Trustee Co. Ltd. v First Mexican Acceptance Corp., 273 AD2d 81, 81 [2000], lv denied 95 NY2d 766 [2000]). Accordingly, we find New York law controlling in this matter.
Centennial Insurance Company v. Apple Builders & Renovators, Inc.
Lindabury, McCormick, Estabrook & Cooper, P.C., New York
(Scott M. Yaffe of counsel), for appellant.
McElroy, Deutsch, Mulvaney & Carpenter, LLP, Morristown,
NJ (Robert S. Moskow II of counsel), for respondent.
Order, Supreme Court, New York County (Karla Moskowitz, J.), entered November 5, 2007, which, insofar as appealed from, denied defendants' cross motion to disqualify plaintiff's attorneys, unanimously affirmed, with costs.
The motion court properly denied defendants' cross motion, since defendant Apple Builders & Renovators, Inc. had executed a written waiver in its retainer agreement with the same law firm specifically waiving any conflict of interest that might arise from the firm's representation of Centennial and Apple. Apple cannot compel the disqualification of plaintiff's counsel simply because the representation to which it consented has since devolved into litigation (see St. Barnabas Hosp. v New York City Health and Hospitals Corp., 7 AD3d 83, 92 [2004]). Apple's claim that it did not understand the implications of the waiver is unsupported by the clear language of the retainer agreement and the record evidence.
Larry E. Knight, Inc. v. QBE Insurance Corp.
Smith Mazure Director Wilkins Young & Yagerman, P.C.,
New York (Marcia K. Raicus of counsel), for appellants.
Camacho Mauro Mulholland, LLP, New York (Eric L. Cooper
of counsel), for respondents.
Order, Supreme Court, New York County (Martin Shulman, J.), entered July 7, 2008, which, to the extent appealed from, denied defendants' motion for summary judgment dismissing the complaint, unanimously modified, on the law, so much of the motion as sought dismissal of the first, second, third, and fifth causes of action granted, and otherwise affirmed, without costs.
In this declaratory judgment action, there are issues of fact as to whether plaintiffs' injuries in the underlying action were caused by negligence on the part of defendant JEM Erectors, which in turn generate issues of fact as to JEM's duty to indemnify the corporate Knight plaintiff under their subcontract (see Carboy v Cauldwell-Wingate Co., 43 AD3d 261 [2007]; Medina v New York El. Co., 250 AD2d 656 [1998]). Plaintiffs' argument that the indemnity provision in the Knight-JEM subcontract imports with it a duty to insure fails, because the duty to indemnify is distinct from, and does not inherently contain, a duty to insure (see Kinney v Lisk Co., 76 NY2d 215, 218 [1990]). Since the subcontract contains no obligation on the part of JEM to procure insurance for Knight, Knight cannot be deemed an additional insured under the additional-insured endorsement to JEM's commercial general liability policy (see International Couriers Corp. v North Riv. Ins. Co., 44 AD3d 568 [2007]; Stainless, Inc. v Employers Fire Ins. Co., 69 AD2d 27, 32-34 [1979], affd 49 NY2d 924 [1980]). Because defendants demonstrably have no duty to procure insurance for Knight, plaintiffs' claim for breach of the duty to procure insurance must also fail.
There is no basis in this record for interfering with the motion court's discretionary decision to decline to dismiss plaintiffs' request for declaratory relief in the fourth cause of action, in light of the prior pendency of claims asserted in the context of the underlying personal injury action (see Whitney v Whitney, 57 NY2d 731 [1982]).
Goldstein v Massachusetts Mutual Life Ins. Co.
Niehaus LLP, New York (Paul R. Niehaus of counsel), for
appellant.
Rivkin Radler LLP, Uniondale (Harris J. Zakarin of counsel),
for respondent.
Order, Supreme Court, New York County (Emily Jane Goodman, J.), entered February 19, 2008, which, to the extent appealed from, granted defendant's motion to dismiss the complaint, unanimously affirmed, with costs.
In 1992, plaintiff chiropractor purchased a disability insurance policy from defendant's predecessor-in-interest. In 1993, he sustained nerve damage which impaired the use of his left arm as a result of a motor vehicle accident, and in 1994, he was directed to stop working as a chiropractor and began receiving disability benefits. Later that year plaintiff was diagnosed with Epstein Barr virus/chronic fatigue syndrome, and in May 1999, with generalized anxiety disorder, accompanied by obsessive compulsive disorder.
Plaintiff commenced his first action against defendant in New York County in 1999 alleging that he was "Presumptively Totally Disabled" under the terms of the policy, and seeking a declaration that the requirement that he submit monthly progress reports and remain under a physician's care be waived. That complaint was dismissed on the basis that plaintiff's injury did not meet the policy's definition of "presumptive disability."
Plaintiff commenced a second action against defendant in Queens County in 2005, asserting claims for, inter alia, a declaration that the requirement of a doctor's care be waived and intentional and negligent infliction of emotional distress by undertaking conduct to aggravate his chronic fatigue syndrome. That action was dismissed upon a finding that the claim for declaratory relief was barred by res judicata and that the tort claims were time barred (see Goldstein v Massachusetts Mut. Life Ins. Co., 32 AD3d 821 [2006]).
Plaintiff commenced this action in 2007 alleging that defendant engaged in a campaign of harassment in administering the subject policy by, inter alia, requiring him to submit monthly reports, delaying payments, and refusing to acknowledge the permanence of his injury, most of which conduct was alleged to have occurred before 2005. As a result of this conduct, plaintiff allegedly suffered severe emotional distress.
All three actions involve the same parties, insurance policy, claim and challenge to the frequency of reports demanded. Thus, plaintiff's claims for intentional and negligent infliction of emotional distress, to the extent they arise from pre-2005 conduct, were properly dismissed on the ground of res judicata, as the claims arise out of the same series of transactions as the prior actions (see Matter of Hunter, 4 NY3d 260, 269 [2005]; O'Brien v City of Syracuse, 54 NY2d 353, 357 [1981]). For the same reason, the claim for breach of the covenant of good faith and fair dealing arising out of pre-2005 conduct, was subject to dismissal on res judicata grounds. The claims for intentional and negligent infliction of emotional distress, as they relate to pre-2005 acts, are also barred by the doctrine of collateral estoppel as identical claims were dismissed in 2005 (see D'Arata v New York Cent. Mut. Fire Ins. Co., 76 NY2d 659, 664 [1990]), and plaintiff cannot relitigate his dismissed claims by adding allegations that could have been brought earlier.
Plaintiff's claims for intentional and negligent infliction of emotional distress, to the extent not otherwise barred, fail to state a cause of action as they lack the necessary element of "extreme and outrageous conduct" (Howell v New York Post Co., 81 NY2d 115, 121 [1993]; see Berrios v Our Lady of Mercy Med. Ctr., 20 AD3d 361, 362 [2005]). This element requires conduct "so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community" (Howell, 81 NY2d at 122 [internal quotation marks and citations omitted]), and defendant's demand of progress and physician's reports at a permissible frequency and the occasional delay in the payment of benefits, clearly does not rise to such a level of conduct.
Furthermore, plaintiff's claim for breach of the covenant of good faith and fair dealing was properly dismissed, since he failed to allege the deprivation of any right under the policy (see Ezrasons, Inc. v American Credit Indem. Co., 257 AD2d 447, 448 [1999]), or that defendant failed to perform under the policy (see Odingo v Allstate Ins. Co., 251 AD2d 81 [1998], lv denied 92 NY2d 810 [1998]).
Potoff v Chubb Indemnity Ins. Co.
Tell, Cheser & Breitbart, Garden City (Kenneth R. Feit of
counsel), for appellant.
Abraham, Lerner & Arnold, LLP, New York (Johnathan C.
Lerner of counsel), for respondent.
Order, Supreme Court, New York County (Martin Shulman, J.), entered May 29, 2008, which denied defendant's motion for summary judgment and granted plaintiff's cross motion for partial summary judgment on the issue of liability, unanimously affirmed, without costs.
When interpreting an insurance clause, it is for the court to determine the parties' rights and obligations based on the specific language of the policy (see Newin Corp. v Hartford Acc. & Indem. Co., 62 NY2d 916, 919 [1984]). In a named-peril policy such as the one at bar, the insured "bears the initial burden of showing that the insurance contract covers the loss," i.e., that the loss resulted from a covered peril (Roundabout Theatre Co. v Continental Cas. Co., 302 AD2d 1, 6 [2002]). Here, the policy covered "accidental discharge or overflow from within a plumbing . . . system" and "damage caused by water . . . which backs up from within . . . drains." Plaintiff established that "the proximate, efficient and dominant cause" (Album Realty Corp. v American Home Assur. Co., 80 NY2d 1008, 1010 [1992]) of the damage to her property was the clogged roof drain, which overflowed and sent water leaking into her apartment. The reasonable person would attribute this backup to a plastic bag that clogged the drain, as evidenced by the fact that the water began to clear from the roof almost immediately after the fire department removed the obstruction.
Defendant argues that plaintiff's apartment was damaged not by water emanating "from within" the drain, but rather from rainwater on the roof that seeped or leaked into the building. We reject that view of the evidence.
We have considered defendant's other arguments and find them unavailing as well.
Travelers Indemnity Company v Zeff Design
McElroy, Deutsch, Mulvaney & Carpenter LLP, New York
(Brian W. Keatts of counsel), for appellant.
Katz & Rychik, P.C., New York (Abe M. Rychik of counsel),
for respondents-appellants.
L'Abbate, Balkan, Colavita & Contini, L.L.P., Garden City
(Douglas R. Halstrom of counsel), for respondents.
Order, Supreme Court, New York County (Barbara R. Kapnick, J.), entered November 27, 2007, which, to the extent appealed from, granted the Hage defendants' motion for summary judgment dismissing the complaint against them, and granted defendant Z One's motion to dismiss the complaint only to the extent of dismissing the cause of action against it for professional malpractice, unanimously affirmed, with costs.
There was no waiver of subrogation in the contract and rider at issue. The court correctly found the rider did not incorporate certain provisions in the AIA forms which provide for a waiver of subrogation. Specifically, the "contract documents" referred to in paragraph 3(d)(ii) of the rider are not the contract and rider. Rather, that paragraph undoubtedly referred to contracts Z One was to enter into with its subcontractors. Accordingly, Z One did not demonstrate that Leibovitz clearly and unequivocally waived any claim for subrogation.
Assuming without deciding that Z One can properly raise the argument, Travelers did not pay Leibovitz voluntarily or fail to invoke applicable exclusions in the subject policy. Accordingly, this subrogation action is not barred by Travelers' payment to its insured (cf. Employers Mut. Liab. Ins. Co. of Wis. v Di Cesare & Monaco Concrete Constr. Corp., 9 AD2d 379, 382 [1959]; Travelers Ins. Co. v Nory Const. Co. (184 Misc 2d 366 [2000], affd 281 AD2d 956 [2001]). Once Leibovitz demonstrated the existence of the all-risk policy and the loss, Travelers bore the burden of proving that the proximate cause of the loss came within one of the exclusions (Holiday Inns Inc. v Aetna Ins. Co., 571 F Supp 1460, 1463 [SD NY 1983]). Indeed, to avoid coverage under such circumstances, "it is not sufficient for the all risk insurers' case for them to offer a reasonable interpretation under which the loss is excluded; they must demonstrate that an interpretation favoring them is the only reasonable reading of at
least one of the relevant terms of exclusion" (Pan Am. World Airways v Aetna Cas. & Sur. Co., 505 F2d 989, 1000 [2d Cir 1974]). Therefore, it is not sufficient for Z One to suggest various policy exclusions that may apply. Rather, it must demonstrate that its interpretation of a certain exclusion is the only reasonable reading of that exclusion, and that the proximate cause of the loss fell within that exclusion. Z One has failed to meet that burden.
Z One does not set forth its theory of how the subject wall settled, nor does it offer definitive proof that one of the policy exclusions applies to that event. In any event, as the motion court found, the "Earth Movement" and "Wear and tear" exclusions appear to be limited to shifting caused by the gradual effect of natural causes, not by the sudden effect of construction activities. Furthermore, the exclusion for defective work does not apply where the damage to the property resulted from a "Covered Cause of Loss," as was the case here. Finally, the note regarding the payment to Leibovitz, which read "CELEBRITY INVOLVED AND ADJUSTMENT HAS BEEN DIFFICULT AND MUST GET OUT PAYMENT TODAY," does not lead to the conclusion that Travelers paid Leibovitz as a volunteer or that it could have disclaimed coverage on the basis of an exclusion.
The court correctly dismissed the complaint as against the Hage defendants. The record makes clear that Hage had no obligations with regard to underpinning. Indeed, pursuant to Hage's agreement with Z One, Hage was not contractually obligated to - and did not - perform any services related to the installation of underpinning, shoring or bracing, or to other stability measures. That fact was further supported by various notations on Hage's drawings and specifications, which made clear that all underpinning, sheeting, shoring or other similar required construction would be the contractor's responsibility, that the contractor was to retain a licensed professional engineer to provide all necessary designs and required inspections, and that the contractor was to provide all measures and precautions necessary to prevent damage and settlement of existing or new construction. Furthermore, while Hage filed a Technical Report form with the City, indicating that it would conduct controlled inspections of the shoring, structural stability and concrete, it did so only to expedite the filing process for obtaining a construction work permit. Z One was notified of that fact and was advised that before construction was commenced, performance of these inspections should be taken over by a controlled inspection company engaged by someone other than Hage. In any event, as the motion court found, the record demonstrates that there is no evidence of negligence on Hage's part, since its specifications were not followed, and the settling happened only after there was a deviation from Hage's instructions.
Moreover, Travelers failed to include an expert's affidavit to support its conclusion that it was Hage's design "first and foremost" that failed. A claim of malpractice against a professional engineer requires expert testimony to establish a viable cause of action (see e.g. 530 E. 89 Corp. v Unger, 43 NY2d 776 [1977]). "A claim of professional negligence requires proof that there was a departure from accepted standards of practice, and that the departure was a proximate cause of the injury" (Hamilton Textiles v Estate of Mate, 269 AD2d 214, 215 [2000]). Travelers failed to provide such proof from an expert in opposition to Hage's motion, and this also warranted dismissal of the complaint as against Hage.
Travelers further argues that the court erred in dismissing its causes of action for breach of contract and misrepresentation against Hage. An allegation that a party failed in the proper performance of services related primarily to its profession is a claim of professional malpractice (see e.g. Boslow Family Ltd. Partnership v Kaplan & Kaplan, PLLC, 52 AD3d 417 [2008], lv denied 11 NY3d 707 [2008]). Accordingly, while Travelers casts claims in contract and negligence, this does not mean that the allegations fall into those designated causes of action (see Matter of R.M. Kliment & Frances Halsband, Architects [McKinsey & Co., Inc.], 3 NY3d 538 [2004]), and the issue is whether the allegations set forth by the plaintiff amount to a cause of action for professional negligence.
In order to sustain the claim for misrepresentation, Travelers had to show that the damages it sustained as a result were different or supplementary to its damages sustained by reason of alleged professional malpractice (see generally Simcuski v Saeli, 44 NY2d 442 [1978]). Here, the various causes of action against Hage are based on the same allegations of professional malpractice, and Travelers failed to demonstrate any difference between these two sets of damages. While they may be termed differently by Travelers, the claim for misrepresentation is in fact a cause of action for professional malpractice, and cannot be sustained.
We have considered the parties' remaining arguments for affirmative relief and find them unavailing.